Foreign Direct Investment (FDI) Pours Into India, Surpassing $81 Billion in 2024-25, Marking a 14% Increase
India's Foreign Direct Investment (FDI) Flows Reach a Record High in FY 2024-25
New Delhi — India has witnessed a considerable 14% increase in Foreign Direct Investment (FDI) inflows to $81.04 billion in the financial year 2024-25 compared to $71.28 billion in the previous fiscal year, as per data released by the Ministry of Commerce and Industry. This upward trend is a testament to the nation's attractive investment environment, as India has been making strides to simplify regulatory processes and incentivize foreign investors.
Over the past 11 years, India has steadily grown its annual FDI inflows, expanding from $36.05 billion in FY 2013-14 to the current figure in FY 2024-25. The services sector emerged as the key beneficiary last fiscal year, accounting for 19% of total FDI, followed by computer software and hardware at 16%, and trading at 8%. FDI inflows into the services sector surged by 40.77% to $9.35 billion from $6.64 billion in the prior year.
India is also evolving into a manufacturing hub for foreign investment, experiencing a 18% rise in FDI to $19.04 billion in FY 2024-25 compared to $16.12 billion the year before. Maharashtra dominated as the highest recipient, capturing 39% of total FDI equity inflows in the said fiscal year, while Karnataka and Delhi trailed respectively with 13% and 12%.
In terms of source countries, Singapore claimed the top position with a 30% share, followed closely by Mauritius (17%) and the United States (11%). Over the previous 11 financial years (2014-25), India amassed FDI worth $748.78 billion, marking a 143% increase compared to the preceding 11 years (2003-14). This constitutes approximately 70% of the total FDI received over the past 25 years.
Moreover, the number of source countries for FDI increased from 89 in FY 2013-14 to 112 in FY 2024-25, indicating India's increasing global appeal as an investment destination.
Government initiatives such as "Make in India," "Digital India," and the National Investment Grid have played a crucial role in attracting foreign investment. A series of regulatory reforms have also been implemented to make India more favorable for international investors, including increased FDI caps in critical sectors like defense, insurance, and pension, as well as liberal policies for construction, civil aviation, and single-brand retail trading.
Further noteworthy deregulations enacted from 2019 to 2024 include allowing 100% FDI under the automatic route in mining, contract manufacturing, and insurance intermediaries. Furthermore, the Union Budget for 2025 proposed increasing the FDI limit from 74% to 100% for companies investing their entire premium within India.
In light of this context, the steady and significant growth of FDI inflows underscores India's ongoing efforts to attract foreign investment and establish itself as a competitive and attractive destination for global investors.
In light of India's ongoing economic reforms like "Make in India" and "Digital India," the nation's business landscape has become more alluring for foreign investors, with a 14% increase in Foreign Direct Investment (FDI) to $81.04 billion in the financial year 2024-25. This flourishing investment environment has led to substantial growth in sectors such as services, computer software and hardware, and trading, while attracting foreigners to invest in India's nascent manufacturing sector.
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